Round Table Recap: The OTT Opportunity – A Performance Marketer’s View
Last month, we brought together industry leaders in the Connected TV (CTV) and Over-The-Top (OTT) universe to discuss hot topics in the space, and what we may expect in 2020.
Jesse Math, VP of Paid Media and our OTT lead at ForwardPMX, led the panel alongside Kristin Wnuk, a Director at Hulu who brings eight years of experience and perspective being directly involved in the rapid evolution and growth of the company.
Read the recap of our round table session below and access the full replay here.
“Content is King, and Convenience is Queen.”
Headlines about the decline of TV have proliferated over the last few years, but this is really just an industry narrative. Most consumers actually feel like they’re watching more TV than ever, with so much premium, studio-produced content available to them across a growing number of platforms and services.
To put this in perspective, we shared eMarketer’s statistic that people are now spending an average of 12.2 hours a day with media, 6+ of which are digital. Jesse elaborated, “While it is easier to reach people in some ways, it’s also more difficult because that viewership is so fragmented.”
Relative to media experiences, people’s time and attention is being split between OTT, music and social, to name just a few environments. And each of these platforms offer so many choices. We’re in a world where we (arguably, both as consumers and sometimes advertisers) care less about the devices we use and more about the content itself. That’s why billions are being spent by the top networks to create top-notch programming. As Kristin put it, “content is king, and convenience is queen.”
We’ve learned that people will prioritize the quality content they want and are often willing to pay for multiple streaming services. The chart below depicts the dollars that networks are spending in order to compete and win viewers’ attention. These numbers are only increasing as we move into 2020.
The Shift to CTV
With over 206 million people now using OTT devices, the advertising industry is witnessing a notable shift in spend to CTV. Jesse shared that, “45% of all online ads are now on CTV, replacing desktop for the first time, and representing a 44% increase from last year.” (FreeWheel) This immense and quick change demonstrates a greater need to include OTT in the marketing mix. In total, over 85% of ad delivery now occurs on CTV apps, mobile apps and set-top-box environments. This makes it critically important for brands to invest in video to reach consumers, as this is where much of the viewership and eyeballs are going.
While the demand is there, marketers, including those in attendance, express challenges around the creative capabilities required to deliver an effective OTT experience. Our panelists explained that rather than getting hung up on creating vastly different versions of ads for linear versus OTT, versus even social media environments, they should focus on making sure the message and the intended CTA are clear and relevant to the consumers watching them. Kristin elaborated, “The average person isn’t necessarily differentiating between linear and OTT, so keep that fact in mind when creating ads.” Most of the time, an ad for linear will be a fairly repurpose for OTT, which can help keep costs down as well.
New ways for ads to reach consumers
Hulu commands a unique audience that doesn’t watch other ad-supported OTT (there’s only a 9% overlap, according to comScore’s OTT Intelligence Report). Viewers on Hulu watch Netflix and Amazon, but more niche and targeted ad-supported services deliver a much smaller overlap. This means Hulu represents an audience primed for advertising.
Even with the option to go ad-free on the platform, over 70% choose to continue with the ad-supported version. Kristin expressed to the group, “This is great news for marketers. You have an audience that has chosen to see ads, and they’re much more engaged.”
To broaden the type of ads in the OTT universe, Hulu has dreamed up “pause” and “choice” ads, which are currently live, and “binge” ads, that viewers will see from Q4 2019 into 2020. Pause ads are the first of the non-intrusive format ads. They are simple, static ads that pop up on the screen when viewers pause programming and can take advantage of the moment to reach consumers with a relevant ad experience. See below for a timely pause ad.
Choice ads allow the viewer to select which version of an ad they want to see, promoting engagement from the offset and instilling curiosity in the viewer to see the ad version. Thirdly, the upcoming binge ads are also non-intrusive, and will be directed towards consumers that display binge-watching behaviors. All three of these ad versions promote engagement and can complement the viewing experience. Hulu is planning for half of its ad revenue to come from the new non-intrusive formats in the next three years.
“TV for a digital world should be measured as digital.”
To support our perspective as a performance marketing agency, Jesse positioned OTT as a channel to be led, executed and measured as digital, and by digital teams rather than traditional TV teams. Kristin agreed that there’s still healthy debate to be had between digital and TV marketers, as it relates to getting the most out of your OTT buys and powering them with the right data-driven approach to buying, business outcomes and measurement.
Transacting on OTT programmatically allows marketers to do just this. While the data isn’t perfect, as the landscape still relies on 2nd and 3rd party data, it is a big leap forward from a few years ago and enables greater accuracy than ever before, while creating personalized ad experiences for viewers.
The future of OTT will be powered by audience-first methodologies. In fact, US advertisers expect 60% of all OTT buys to be audience targeted by the end of 2020, according to FreeWheel’s report.
Today, the average American consumer has a subscription to 3.4 different streaming services. More platforms are coming, more services are coming, and undoubtedly more content is coming. Concerns around fragmentation are definitely real, but the opportunity is equally as real, and an exciting one at that.
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